Denmark Tax Agency Posts Supreme Court Judgment Clarifying VAT Anti-Abuse Rules Under EU Law

The Danish Customs and Tax Administration May 29 posted online the Supreme Court’s judgment in Case No. BS-16178/2021-HJR, clarifying VAT anti-abuse rules under EU law. An insurer established a wholly-owned subsidiary that developed an IT and telephone system primarily for VAT-free internal leasing to the insurer. The companies then jointly registered for VAT. The subsidiary claimed a full VAT deduction of expenses from developing the system. The tax agency found that the leasing, followed by the joint registration, amounted to an abuse of the VAT rules. On review, the Supreme Court found that: 1) under the case law of the ...